New factory jails are to be built that allow prisoners to earn money for their
families and to save up a nest egg for their release, it has been revealed.

The development is an extension to existing schemes in which inmates work but any money earned goes to their victims of crime.

It is thought the "routine and discipline" of employment could cut reoffending rates and reduce the burden on the state of looking after prisoners and their loved ones.

Under the new proposals being unveiled by Justice Secretary Ken Clarke, prisoners will be able to use the cash they earn to pay maintenance towards their partners and children like other absent fathers.

They will also be allowed to save up "good behaviour bonds", nest eggs they can tap into after their release, provided they stay out of trouble.

Mr Clarke claims that safeguards would be put in place that meant the funds could only be spent on legitimate items to help prisoners stay away from crime, such as training or work materials.

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The Justice Secretary wants to double the number of prisoners employed in productive work in jail to 20,000 by 2020.

A number of the new prisons are being designed, with integrated factories.

The Government will announce the first factory jails this year and will invite leading companies to tender for prison labour.

Victim Support has so far received £1 million from prisoners' wages in past 12 months. The rest of their earnings are usually spent on cigarettes and simple luxuries.

One3One Solutions, a Government justice enterprise, is working with more than 20 major firms including Virgin and Marks & Spencer to explore business opportunities.

Mr Clarke told the Daily Mail: "People who get sent to prison should be punished.

"But prisons should also be trying to reform those who have the gumption to sort themselves out to go straight when they have finished their sentences.

"Prisoners are more likely to give up crime if they are ready to get and hold a job in the outside world."

Prisons already provide a variety of products and commercial services, such as office furniture, laundry services, recycling, metalwork, printing and making uniforms.

At HMP Brixton, TV chef Gordon Ramsay has trained a group of convicts to become bakery chefs, producing cakes for Caffè Nero under the brand name Bad Boys' Bakery for a Channel 4 series starting tonight.

Three-quarters of inmates at HMP Manchester are in full time/full-time work, education or training in a fully commercial factory environment which includes a large laundry, a textiles workshop, a bakery serving external customers and a recycling plant.

At HMP Highdown, in Surrey, and HMP Cardiff there are branches of The Clink, a restaurant open to the public, training chefs to five-star cordon bleu standards.

In the US, hard work has been part of a prison term for more than a century.

For instance, Oregon Correction Enterprises makes uniforms for McDonalds, while its Prison Blues jeans are sold around the world.